Coniston Partners, which launched a tender offer to acquire food service giant TW Services Inc., said Friday that it would sell off the company’s small health-services operations if the deal is successful.
The operation, which employs about 4,100 people, reported revenue of $100 million last year. It is a very small part of TW’s overall operations, which include the Denny’s and Hardee’s restaurant chains.
The aggressive investment firm also said Citibank has agreed to provide $750 million to finance what would be a $1.14-billion acquisition.
In a filing with the Securities and Exchange Commission, Coniston said it would sell American Medical Services, a Milwaukee-based company that operates 27 skilled nursing facilities and two retirement living centers in Wisconsin, California, Colorado and Illinois.
Coniston principal Paul E. Tierney Jr. said the partners paid a $5-million fee in order to secure Citibank’s participation as primary lender in the deal.
While most acquiring firms try to postpone paying fees until a deal is closer to completion, Tierney said Coniston “did not want anyone to think this deal couldn’t be financed.”
He also said the agreement with Citibank indicates “that this is clearly different from other instances where we haven’t tried to buy a company” but instead promoted its restructuring.
Coniston, which was snubbed earlier this month by TW, began a $29-a-share tender offer Friday.
The cash tender offer for 15.75 million shares, amounting to about $456.75 million, if successful would give it a majority stake in TW, which on Oct. 12 rejected the group’s proposal for a $28-a-share buyout.
The group, which already owns about 19% of TW’s 48.5 million common shares outstanding, intends to acquire the remaining shares of TW in a subsequent merger for $29 a share, giving the entire buyout an indicated value of about $1.14 billion.